NZ dollar falls to two-week low vs. yen

April 9 (BusinessDesk) – The New Zealand dollar
fell to a two-week low against the yen as investors pared
back expectations the Bank of Japan will soon introduce more
stimulus.

The kiwi fell as low as 88 yen this morning,
and was trading at 88.15 yen at 8am from 88.86 yen at 5pm
yesterday. The local currency benefited from a weaker
greenback, touching a week-high of 86.81 US cents, and was
trading at 86.71 cents at 8am from 86.31 cents yesterday.

The Japanese currency was the best performer overnight
after the nation’s central bank surprised some investors
by not adding extra stimulus following a two-day policy
meeting. Governor Haruhiko Kuroda signalled there was no
need for additional stimulus to escape deflation and
signalled confidence that the world’s third-largest
economy would recover from the impact of this month’s
sales tax rise.

“Governor Kuroda suggested the economy
would be resilient to the increased sales tax introduced at
the beginning of April. However, the bank stands ready to
ease further if necessary, which we suspect may occur later
in the year,” Kymberly Martin, senior market strategist at
Bank of New Zealand, said in a note. “The fact that it did
not announce any measures this time will have surprised
some, helping add to the strengthening tone in the Japanese
yen.”

In New Zealand today, data is released on
electronic card transactions for March at 10:45am. Tonight,
the Federal Reserve releases the minutes from its last
meeting and data will be published on the UK and German
trade balances.

The New Zealand dollar slipped to 51.76
British pence from 51.94 pence yesterday after UK data on
manufacturing and industrial production beat expectations,
turning investor attention to the potential for interest
rate hikes.

The kiwi slipped to 92.63 Australian cents
from 92.92 cents yesterday ahead of reports on Australian
consumer sentiment and housing finance today.

The local
currency was little changed at 62.82 euro cents from 62.80
cents yesterday while the trade-weighted index was steady at
80.50.

The Wellington-based BusinessDesk team led by former Bloomberg Asian top editor Jonathan Underhill and Qantas Award-winning journalist and commentator Pattrick Smellie provides a daily news feed for a serious business audience.

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